WWE Article Round-Up

Some reading material you may want to devour if you haven't read it yet:

Jonathan Snowden: "WWE Network: How the Hardcore Fan Just Won the Wrestling War" (Bleacher Report)

"Wrestling television will no longer build to a mega-event, one designed to attract casual fans. It will be a unified product, one designed to get wrestling fanatics to sign up for six months of a service."

I don't think WWE will end up being driven by hardcore WWE fans. At best, there will be a bifurcated focus where the Network may cater more to them, but overall the dynamics aren't changing -- TV contracts reign supreme (as they have for years) and collapse of WWE 24/7 demonstrates that the few hundred thousand dedicated fans aren't going to represent the majority of the million subscribers that WWE is aiming for with the Network.

Lawrence Lewitinn: "WWE is going to belly flop: portfolio manager" (CNBC)

"Valuation isn't compelling at all, trading at 109 times forward earnings versus an average of 19.4 over the last three years," says Stephenson

Trolling opening paragraph aside, I think there's some serious questions about which buzz is driving WWE stock up, and whether good news on 2015 TV Rights negotiations will defray the massive Network start-up costs/revenue cannibalization that will become evident as the rest of the fiscal year.

David Bixenspan: "Breaking Down Latest Buzz Surrounding Negotiations for WWE's TV Rights" (Bleacher Report)

"A&E itself has never aired anything like pro wrestling, but in 2014, there's no real reason why they can't, as their bread and butter is a wide swath of reality shows with no branding that would get in the way of something like WWE shows. As the home of Duck Dynasty, the most-watched show on cable, the addition of Raw andSmackDown would give them a very nice prime time average."

In the end, I still think that NBCU will retain both Raw and Smackdown. While I continue to lament that Smackdown is on cable and not "free" TV (though there are Hulu replays available), I wouldn't be surprised if WWE strengthen their tie to Comcast/NBCUniversal in 2015 onwards.

Grey Owl Capital: "Will World Wrestling Entertainment Pin NBC?" (Seeking Alpha)

"Thus, we were willing to overlook their shareholder-unfriendly dual share class structure, an operating history that includes questionable capital allocation decisions, and a dividend that is not covered by current cash flow. The immediacy and magnitude of the event present an incredible risk reward dynamic."

Most of this article is just regurgitating WWE Conference Call and Press Release talking points, but this excerpt did have me smiling. It underscores the fact that while WWE is a publicly traded stock, it's controlled by the McMahon family and what they want to do (start a film division, buy a resturant, start a network), they do. However, it does also remind us that the investment community is intrigued and excited about the new Network (there were tons of callers today for the Network conference call), even if it doesn't immediately generate profit.

They're all interesting and well-written pieces to consider.
@mookieghana